Report: S.F. small businesses face permit obstacles

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Small Business Commission study finds crucial process is complicated and costly

San Francisco’s small businesses face an uphill battle, and often a costly one, when trying to obtain city permits.

A new report, commissioned by The City’s Small Business Commission, says there are "serious deficiencies" in the permitting process for small businesses.

"As many small-size-business owners can tell you, the city permitting process is a labyrinth, to say the least," said Jordanna Thigpen, the commission president.

The City does not make clear which permits business owners need, and there is a lack of coordination between The City’s permitting agencies, the report says.

Supervisor Fiona Ma, working with the commission, is championing an overhaul of The City’s permitting process, and wants to establish a "one-stop shop" office in City Hall for business permits. The office would also serve as a place where business owners can receive guidance on the permitting process.

Currently, small-business owners may have to go through as many as 10 city agencies — such as the Department of Public Health or the Department of Building Inspection — for the necessary paperwork to legally open for business.

The difficult permitting process is "one of the reasons why we see so many empty storefronts around The City," Ma said.

The report finds there is "an adversarial relationship between the business owner and [city] agencies," no reliable time frame for the issuance of permits, and business owners choose not to expand just so they do not have to face the permitting process.

Ma said The City should try to fix the permitting system internally, but has not ruled out the possibility of a ballot measure.

Small Business Commissioner Michael O’Connor said it only makes sense to make the permitting system friendlier, since The City is relying "more and more" on these small businesses to help fund its operating budget. About 85 percent of The City’s businesses are considered small businesses, those which employ less than 20 workers.

Thigpen said any delay in the permitting process results in the business owner paying for it. When the permits are not issued, and the business cannot open, the owner still has to pay the rent, she said.

"Anything San Francisco could do to expedite the process would encourage small business to relocate here or expand here," said Kevin Westley, the executive director of the Golden Gate Restaurant Association.

The report, drafted by Joyce Scales, a student at the Goldman School of Public Policy at the University of California, Berkeley, may be discussed by the commission as early as this Monday.